New Car Buying: All About Rebates

Use these valuable facts regarding car and truck rebates. These rebates are not always beneficial, and this information will help you learn the facts.

Vehicle rebates are a great way to save money when buying a new car or truck, right? Not in every case! The offer of a valuable rebate with the purchase of a new vehicle is not always in the best interest of the consumer. This type of offer is designed to draw you in and obtain your valuable business. Vehicle dealerships play on words and use psychological jargon to make the offer sound fantastic, when in fact it may be detrimental to your financial health and well-being.

Usually the "rebate" offered is not a rebate in the normal sense of the word. Don't expect to get an interest-free check in the mail after buying your new car or truck. The money you receive in the form of a check is included in the price of the vehicle. You will be paying interest on this money, so if you decide to take advantage of a "rebate" offer, it's wise to use the money to pay down the car or truck loan. The lure of "free" money is appealing, but since you're paying interest on it, it's not free at all.

Some car dealerships offer a different type of rebate that gives the customer a year or more of no vehicle payments. This sounds wonderful, doesn't it? It's not as great as it sounds! You will still receive a coupon book or bill in the mail so you can begin making your vehicle payments. More than likely you will receive this payment booklet or first bill shortly after signing your loan agreement, and your payments will start the following month. But what about the payment-free offer? Instead of not having payments for a specified period of time, you will more than likely receive a check in the mail equaling what the dealer feels is a year of payments. This amount might not even come close to what you would actually pay in a year. It's a predetermined amount based on payments according to THEIR terms. The problem with this is, your payments will start right away. This means the rebate check you receive is in your hands. What could possibly be wrong with this? A big rebate check would be wonderful! The car dealership or finance company is hoping you'll take that check and spend it. They don't want you to apply it to the vehicle payments each month. You are still going to pay interest on the entire loan, including the money you just received in the form of a check, so they don't care what you do with the money. It may seem like a dream come true to get a big check in the mail, but keep in mind it's not without cost. Many consumers would be tempted to go on a shopping spree.

Although helpful for some, these types of rebates are not for everyone. If you have great self-control when it comes to money, these can be beneficial offers, but many people would spend the money on frivolous things. If you need money for something you don't mind paying interest on, this can actually be beneficial. Carefully consider these facts before agreeing to these types of car or truck rebates. You may not be saving anything in the long run.

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